82R9311 DAK-F
By: Kleinschmidt H.B. No. 2661
A BILL TO BE ENTITLED
AN ACT
relating to settlement of certain civil actions.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 42, Civil Practice and Remedies Code, is
amended to read as follows:
CHAPTER 42. SETTLEMENT
Sec. 42.001. DEFINITIONS. In this chapter:
(1) "Claim" means a request, including a counterclaim,
cross-claim, or third-party claim, to recover monetary damages or
to obtain other relief. The term does not include a request to
recover litigation costs.
(2) "Claimant" means a person making a claim.
(3) "Defendant" means a person from whom a claimant
seeks recovery on a claim, including a counterdefendant,
cross-defendant, or third-party defendant.
(4) "Governmental unit" means the state, a unit of
state government, or a political subdivision of this state.
(5) "Litigation costs" means money actually spent and
obligations actually incurred that are directly related to the
action [case] in which a settlement offer is made. The term
includes:
(A) court costs;
(B) reasonable deposition costs;
(C) reasonable fees for not more than two
[testifying] expert witnesses; and
(D) [(C)] reasonable attorney's fees.
(6) "Settlement offer" means an offer to settle or
compromise a claim made in compliance with Section 42.004 [this
chapter].
Sec. 42.002. APPLICABILITY AND EFFECT. (a) [The
settlement procedures provided in this chapter apply only to claims
for monetary relief.
[(b)] This chapter does not apply to:
(1) a class action;
(2) a shareholder's derivative action;
(3) [an action by or against a governmental unit;
[(4)] an action brought under the Family Code;
(4) [(5)] an action to collect workers' compensation
benefits under Subtitle A, Title 5, Labor Code; or
(5) [(6)] an action filed in a justice of the peace
court.
(b) [(c) This chapter does not apply until a defendant files
a declaration that the settlement procedure allowed by this chapter
is available in the action. If there is more than one defendant, the
settlement procedure allowed by this chapter is available only in
relation to the defendant that filed the declaration and to the
parties that make or receive offers of settlement in relation to
that defendant.
[(d)] This chapter does not limit or affect the ability of
any person to:
(1) make an offer to settle or compromise a claim that
does not comply with Section 42.004 [this chapter]; or
(2) offer to settle or compromise a claim in an action
to which this chapter does not apply.
(c) [(e)] An offer by a party to settle or compromise that
does not comply with Section 42.004 [is not made under this chapter]
or an offer to settle or compromise made in an action to which this
chapter does not apply does not entitle the [offering] party to
recover litigation costs under this chapter.
Sec. 42.003. ELECTION BY GOVERNMENTAL UNITS; WAIVER. (a)
This chapter does not apply to an action by or against a
governmental unit unless the governmental unit elects to seek
recovery of litigation costs under this chapter or elects to waive
immunity from liability for costs awarded under this chapter.
(b) To be effective as an election or waiver, the
governmental unit must make the election or waiver specifically and
affirmatively by a writing filed with the court on or before the
45th day after the date the governmental unit files its original
petition or original answer.
(c) An election or waiver is effective only in the action in
which it is filed.
Sec. 42.004. MAKING SETTLEMENT OFFER. (a) A defendant may
serve on a claimant a settlement offer to settle all claims in the
action between that defendant and claimant.
(b) A settlement offer must:
(1) be in writing;
(2) state that it is made under this chapter;
(3) state the terms by which the claims may be settled;
(4) state a deadline by which the settlement offer
must be accepted; and
(5) be served on all parties to whom the settlement
offer is made.
(c) A defendant may not make a settlement offer under this
section before the 60th day after the date the defendant files a
responsive pleading or otherwise appears in the action.
(d) A defendant may not make a settlement offer under this
section after the 14th day before the date set for trial.
(e) The parties are not required to file a settlement offer
with the court.
Sec. 42.005. ACCEPTING SETTLEMENT OFFER. (a) A claimant
may accept a settlement offer on or before 5 p.m. on the 14th day
after the date the claimant received the settlement offer or before
the deadline stated in the settlement offer, whichever is later.
(b) Acceptance of a settlement offer must be:
(1) in writing; and
(2) served on the defendant who made the settlement
offer.
Sec. 42.006. WITHDRAWING SETTLEMENT OFFER. (a) A
defendant may withdraw a settlement offer by serving a written
withdrawal on the claimant to whom the settlement offer was made
before the claimant accepts the settlement offer. A claimant may
not accept a settlement offer after it is withdrawn.
(b) If a defendant withdraws a settlement offer, that
settlement offer does not entitle the defendant to recover
litigation costs.
Sec. 42.007. REJECTING SETTLEMENT OFFER. For purposes of
this chapter, a settlement offer is rejected if:
(1) the claimant to whom the settlement offer was made
rejects the settlement offer by serving a written rejection on the
defendant making the settlement offer; or
(2) the settlement offer is not withdrawn and is not
accepted before the deadline for accepting the offer.
Sec. 42.008 [42.004]. AWARDING LITIGATION COSTS. (a) A
defendant who makes a settlement offer to a claimant seeking
monetary relief shall recover litigation costs from the claimant
if:
(1) the settlement offer is rejected;
(2) the court signs a judgment on the claim;
(3) the amount of monetary relief awarded to the
claimant in the judgment is more favorable to the defendant who made
the settlement offer than the settlement offer; and
(4) the difference between the amount of monetary
relief awarded to the claimant in the judgment and the amount of the
settlement offer is equal to or greater than 10 percent of the
amount of the settlement offer.
(b) A defendant who makes a settlement offer to a claimant
seeking nonmonetary relief, other than injunctive relief, may
recover litigation costs from the claimant if:
(1) the settlement offer is rejected;
(2) the court signs a judgment on the claim; and
(3) the judgment is more favorable to the defendant
who made the settlement offer than the settlement offer.
(c) A court may include in litigation costs awarded to a
defendant under this section only those litigation costs incurred
by the defendant who made a settlement offer after the rejection of
the earliest settlement offer that entitles the defendant to the
award of litigation costs under this section.
(d) If a court awards litigation costs against a claimant
under this section, the court may not award the claimant the
post-settlement offer portion of any litigation costs to which the
claimant would otherwise be entitled under Chapter 38 or other
applicable law.
(e) An award of litigation costs by the court under this
section is reviewable under a de novo standard. [If a settlement
offer is made and rejected and the judgment to be rendered will be
significantly less favorable to the rejecting party than was the
settlement offer, the offering party shall recover litigation costs
from the rejecting party.
[(b) A judgment will be significantly less favorable to the
rejecting party than is the settlement offer if:
[(1) the rejecting party is a claimant and the award
will be less than 80 percent of the rejected offer; or
[(2) the rejecting party is a defendant and the award
will be more than 120 percent of the rejected offer.
[(c) The litigation costs that may be recovered by the
offering party under this section are limited to those litigation
costs incurred by the offering party after the date the rejecting
party rejected the settlement offer.
[(d) The litigation costs that may be awarded under this
chapter may not be greater than an amount computed by:
[(1) determining the sum of:
[(A) 50 percent of the economic damages to be
awarded to the claimant in the judgment;
[(B) 100 percent of the noneconomic damages to be
awarded to the claimant in the judgment; and
[(C) 100 percent of the exemplary or additional
damages to be awarded to the claimant in the judgment; and
[(2) subtracting from the amount determined under
Subdivision (1) the amount of any statutory or contractual liens in
connection with the occurrences or incidents giving rise to the
claim.
[(e) If a claimant or defendant is entitled to recover fees
and costs under another law, that claimant or defendant may not
recover litigation costs in addition to the fees and costs
recoverable under the other law.
[(f) If a claimant or defendant is entitled to recover fees
and costs under another law, the court must not include fees and
costs incurred by that claimant or defendant after the date of
rejection of the settlement offer when calculating the amount of
the judgment to be rendered under Subsection (a).
[(g) If litigation costs are to be awarded against a
claimant, those litigation costs shall be awarded to the defendant
in the judgment as an offset against the claimant's recovery from
that defendant.]
Sec. 42.009 [42.005]. SUPREME COURT [TO MAKE] RULES. [(a)]
The supreme court may amend or adopt rules that are not inconsistent
with this chapter [shall promulgate rules implementing this
chapter. The rules must be limited to settlement offers made under
this chapter. The rules must be in effect on January 1, 2004.
[(b) The rules promulgated by the supreme court must
provide:
[(1) the date by which a defendant or defendants must
file the declaration required by Section 42.002(c);
[(2) the date before which a party may not make a
settlement offer;
[(3) the date after which a party may not make a
settlement offer; and
[(4) procedures for:
[(A) making an initial settlement offer;
[(B) making successive settlement offers;
[(C) withdrawing a settlement offer;
[(D) accepting a settlement offer;
[(E) rejecting a settlement offer; and
[(F) modifying the deadline for making,
withdrawing, accepting, or rejecting a settlement offer.
[(c) The rules promulgated by the supreme court must address
actions in which there are multiple parties and must provide that if
the offering party joins another party or designates a responsible
third party after making the settlement offer, the party to whom the
settlement offer was made may declare the offer void.
[(d) The rules promulgated by the supreme court may:
[(1) designate other actions to which the settlement
procedure of this chapter does not apply; and
[(2) address other matters considered necessary by the
supreme court to the implementation of this chapter].
Sec. 42.010. MODIFICATION OF TIME LIMITS. A court may by
order modify a time limit specified in this chapter as the result of
a pretrial conference conducted under Rule 166, Texas Rules of
Civil Procedure.
Sec. 42.011. SERVICE. Service on a party as required by
this chapter is adequate if performed as provided by Rule 21a, Texas
Rules of Civil Procedure.
Sec. 42.012. ADMISSIBILITY OF EVIDENCE. (a) This chapter
does not affect the admissibility or inadmissibility of evidence as
provided in the Texas Rules of Evidence.
(b) The provisions of this chapter may not be made known to
the jury through any means, including voir dire, introduction into
evidence, instruction, or argument.
SECTION 2. The changes in law made by this Act to Chapter
42, Civil Practice and Remedies Code, apply only to a civil action
commenced on or after the effective date of this Act. A civil
action commenced before the effective date of this Act is governed
by the law in effect immediately before the effective date of this
Act, and that law is continued in effect for that purpose.
SECTION 3. This Act takes effect September 1, 2011.